the principal product of yangsoo enterprises inc is a multipurpose hammer that carri 544713

Preparing Operating Budgets

The principal product of Yangsoo Enterprises, Inc., is a multipurpose hammer that carries a lifetime guarantee. Listed next are cost and production data for the Yangsoo hammer.

Direct materials

Anodized steel: 2 kilograms per hammer at $1.60 per kilogram

Leather strapping for the handle: 0.5 square meter per hammer at $4.40 per square meter

Direct labor

Forging operation: $12.50 per labor hour; 6 minutes per hammer

Leather-wrapping operation: $12.00 per direct labor hour; 12 minutes per hammer Overhead

Forging operation: rate equals 70 percent of department’s direct labor dollars

Leather-wrapping operation: rate equals 50 percent of department’s direct labor dollars In October, November, and December, Yangsoo Enterprises expects to produce 108,000, 104,000, and 100,000 hammers, respectively. The company has no beginning or ending balances of direct materials inventory or work in process inventory for the year.

Required

1. For the three-month period ending December 31, prepare monthly production cost information for the Yangsoo hammer. Classify the costs as direct materials, direct labor, or overhead, and show your computations.

2. Prepare a cost of goods manufactured budget for the hammer. Show monthly cost data and combined totals for the quarter for each cost category.